Demand Theory Reconsidered: Reflections on the Demand for Tourism in Cyprus

Abstract

Cyprus is an important destination for international tourism, but the 1990s has witnessed a growing concern about the future trend of tourist arrivals. Orthodox economics provides a framework for analysing the demand for tourism yet, by treating demand as a function of price, income and competition, orthodox theory ignores the formation of consumer choice. The tourist life-cycle model draws attention to the effect of fashion on choice and Leibenstein's attempt to analyse interpersonal effects into bandwagon, snob and Veblen effects points to the non-functional nature of some demand, but even so the relationship between consumer groups is not well theorized within orthodox economics. The notion of cultural competition as a factor influencing consumer choice implies that the consumer has a strong idea of what he or she wants and is therefore at the same rejecting. While the link between culture and choice is complex the paper argues that it is important to understand it more fully since it has implications for the segmentation of the market and the positioning and promotion of the tourist product.